BRUNSWICK — Residents could be paying more for less after the Town Council adopts its 2010-2011 budget.

The council learned during its annual retreat that it will be forced to consider layoffs, cuts in municipal services and a property tax increase to fill gaps created by cuts in state aid and revenue sharing.

John Eldridge, the town’s finance director, said the council will confront a $1 million hole on the municipal side alone. According to Eldridge, that deficit would equate to a 3 percent property tax increase even if the council adopts a spending plan that keeps expenditures at the current level.

It also excludes the school budget, which in the past has accounted for about 65 percent of the town’s total spending.

The School Department, already facing a $670,000 budget cut if Gov. John Baldacci’s supplemental budget is ratified by the state Legislature, is also anticipating difficult choices due to a projected decline in state aid in the second year of the governor’s already-adopted biennial budget.

The trickle-down comes from Augusta, which is facing declining revenues from sales and income taxes, with a current budget gap of $159 million.

Town officials say the pain will be felt locally, specifically layoffs for municipal employees.

“I don’t think it’s possible to (address the gap) without job losses,” Eldridge said Monday, adding that the municipal budget woes are driven mostly by a sharp reduction in state revenue sharing. The town received $2.1 million in fiscal 2009, he said. It’s slated to receive $1.2 million in fiscal 2010-2011.

“I’ve been here 22 years and I’ve never seen that kind of reduction,” Eldridge said.

The grim financial outlook will mean tough choices for the School Board and council, which are likely to begin preliminary budget talks in the coming weeks.

Council Chairwoman Joanne King noted Monday that at least two councilors want no tax increase, a proposal she said would probably mean sharp cuts in the school budget – an outcome that could not only infuriate local education advocates, but also undermine the town’s recovery from the 2011 closure of Brunswick Naval Air Station.

King said the quandary was illustrated during the recent election campaign.

“I had a lot of people say please don’t raise my property taxes,” she said. “… But we also know the strength of our school system is a reason why people are attracted to living here. It could also be our saving grace to replacing the families leaving with the military.”

“I’m not sure there’s a solution leading to a zero percent,” she added.

The upcoming spending plan and its inherent threat of layoffs could also spell trouble for the town’s quest to build a new police station.

The council has scheduled $6.65 million in its 2010-2011 Capital Improvement Program for the new station, and a council subcommittee has been reviewing potential sites.

However, King acknowledged that borrowing for the facility could be difficult politically at a time when the council is ordering layoffs.

King said that the council had put off building a new facility too many times, but added that the current budget situation “is a little different than anything we’ve seen before.” Nonetheless, she said the council subcommittee will proceed as if the project is still moving ahead.

“We’ll just have to wait and see,” she said.

King added that she’s hoping to involve the public in budget discussions.

“What’s acceptable to cut and what isn’t?” she said. “That’s what we need to know.”

Meanwhile, Brown said the council should makes its decision on layoffs within the next eight to 10 weeks if it wants to realize the full savings. He explained that the job cuts by early April were preferred because of severance agreements with local unions.

Brown said that department heads are reviewing staff levels in anticipation of the cuts.

“It’s going to be a very challenging and gut-wrenching exercise,” he said.